The effects of industrialization and internationalization on the economic growth of the Iberian countries in a long term perspective: an ARDL approach to cointegration

Bearing in mind that industrialization and internationalization were associated with the strong economic performance of the Iberian countries during the so-called Golden Age (1950-1973), the objective of this paper is to test whether these two factors were also associated with economic growth over the long run. Using an ARDL approach to cointegration it was possible to confirm that from the 19th century to the present there has been a positive and statistically significant long-term relationship between industrial production and trade openness in Portugal and Spain, on the one hand, and economic growth, on the other. However, in both countries, industrialization seems to be characterized by a stronger and more significant relationship with growth. Either way, the conclusions of this paper reinforce the argument that both industrialization and internationalization are relevant for the stimulation of economic growth.